Oil falls more than 1% as market awaits response to Saudi oil attacks

Robie de Guzman • September 17, 2019 • 259

Oil shed some of its massive gains on Tuesday (September 17) as the United States flagged the possible release of crude reserves, but the threat of military action over the attacks on Saudi oil facilities kept prices elevated and stocks under pressure.

While equity market losses have not been large, shaky investor confidence continued to support safe-haven assets, with gold edging higher on Tuesday and Treasury prices rising.

Investors otherwise broadly remained on the sidelines ahead of an expected interest rate cut from the U.S. Federal Reserve on Wednesday (September 18) and the next round of U.S.-China trade talks on Thursday.

The benchmark Nikkei average added 0.2% to 22,021.86 in mid-morning trade to mark its highest level since May 7, as soaring oil prices triggered by attacks on Saudi oil facilities boosted oil and gas-related companies.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.6%. Chinese shares fell 0.85%, while Australian shares were down 0.27%.

Brent crude, the international benchmark, fell 1.78% to $67.79 per barrel in Asia on Tuesday. On Monday Brent surged by 14.6% for its biggest one-day percentage gain since at least 1988.

Saturday’s attack on Saudi oil facilities has halved the kingdom’s oil output, creating the biggest disruption to global oil supplies in absolute terms since the overthrow of the Iranian Shah in 1979, International Energy Agency data show.

In South Korea, stocks opened slightly lower with the Korea Composite Stock Price Index (KOSPI) down 3.14 points or 0.15 percent to 2,059.08 points as of 0200 GMT.

China stocks fell on Tuesday as Beijing kept a key money rate unchanged even as recent readings pointed to further downward pressure on the world’s second-largest economy.

A nationwide ceasefire in response to the global coronavirus outbreak went into effect in Yemen on Thursday (April 9), raising hope for an end to the five-year-old war that has pushed millions to the brink of famine.

A Saudi-led coalition fighting against Yemen’s Houthi movement said it would halt military operations from 0900 GMT for two weeks in support of United Nations efforts to end the conflict that has killed more than 100,000 people.

The Iran-aligned movement, which controls the capital Sanaa and most big urban centres, has yet to announce whether it will follow suit in what would be the first major breakthrough in peace efforts since late 2018.

The United Nations and Western allies have pointed to the threat of the coronavirus to push the combatants to restart talks to end the war, which has shattered Yemen’s health system.

The U.N. humanitarian coordinator in Yemen, Lise Grande, told Reuters at least half of Yemen’s population was in a “very degraded health status” while three quarters require some form of humanitarian assistance or protection.

The conflict, widely seen in the region as a proxy war between Saudi Arabia and Iran, has been in military stalemate for years and brought Yemen’s economy to its knees. (Reuters)

President Donald Trump urged Americans on Monday (March 16) to halt most social activities for 15 days and not congregate in groups larger than 10 people in a newly aggressive effort to reduce the spread of the coronavirus in the United States.

Announcing new guidelines from his coronavirus task force, the president said people should avoid discretionary travel and not go to bars, restaurants, food courts or gyms.

As stocks tumbled, Trump warned that a recession was possible, a development that could affect his chances of re-election in November. The Republican president said he was focused on addressing the health crisis and that the economy would get better once that was in line.

The task force implored young people to follow the new guidelines even though they were at lesser risk of suffering if they contract the virus. Older people, especially those with underlying health problems, are at the greatest risk if they develop the respiratory disease.

Reporters staggered their seating, sitting in every other seat in the White House briefing room, to follow social distancing measures.

Trump said the worst of the virus could be over by July, August or later. He called it an invisible enemy.

The president has taken criticism for playing down the seriousness of the virus in the early days of its U.S. spread. On Monday, when asked, he gave himself a good grade for his response.

“I’d rate it a 10. I think we’ve done a great job,” he said.

Trump said a nationwide curfew was not under consideration at this point.

Normally a cheerleader for the U.S. economy, he acknowledged the possibility of a recession while brushing off another dramatic decline on stock markets as investors worried about the virus.

“We’re not thinking in terms of recession, we’re thinking in terms of the virus. Once we stop, I think there’s a tremendous pent up demand, both in terms of the stock market and in terms of the economy,” Trump said. The president has long considered soaring stock markets to be a sign of his administration’s success.

Trump said the administration had talked regularly about domestic travel restrictions but hoped not to have to put such measures in place.

He said he thought it would still be possible for G7 leaders to meet at the Camp David retreat in Maryland in June. Trump upset European countries, which make up a large part of the G7, by instituting travel restrictions from European countries without consulting with them first. (Reuters)

SAUDI ARABIA – The Kingdom of Saudi Arabia on Thursday (March 12) included Filipinos in the list of countries whose citizens are temporarily banned entry due to fears of coronavirus disease (COVID-19).

The new travel ban now covers all countries in the European Union plus the following countries:

Djibouti

Ethiopia

Eritrea

India

Kenya

Pakistan

Philippines

Somalia

South Sudan

Sri Lanka

Sudan

Switzerland

The 13 countries are in addition to 14 nations earlier issued with a travel ban to the Kingdom due to health concerns.

In relation to the ban, all Saudis and legal residents are given 72 hours to return to the Kingdom.

The Department of Foreign Affairs (DFA) meanwhile clarified that the travel ban does not cover Filipinos who are health practitioners.

The Philippine Embassy in Saudi Arabia is still verifying the specific details of the ban such labor arrangements in case foreign workers fail to enter the Kingdom within the 72 hour deadline.

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